Russia’s KOKS offers 10¾% notes, cash in swap for 7¾% notes due 2016

By Susanna Moon

Chicago, March 2 – KOKS Finance Ltd. said it is offering new notes and cash in exchange for its $199,155,000 of outstanding $350 million 7¾% loan participation notes due 2016.

In exchange, the company is offering 10¾% dollar-denominated loan participation notes due Dec. 28, 2018 and a cash amount equal to 11% of the principal amount of notes accepted for exchange, according to a company announcement.

The exchange ratio will be 100%.

The exchange offer will end at11 a.m. ET on March 15 and is being made with the agreement of JSC Koks, the borrower, the release noted.

Settlement will occur on March 21.

The 7¾% notes are guaranteed by JSC Kombinat KMAruda, LLC, Butovskaya Mine, LLC, Tikhova Mine and PJSC Tulachermet on a joint and several basis.

The new notes will be consolidated and form a single issue with $136,496,000 of 10¾% loan participation notes due Dec. 28, 2018.

The company said it “is seeking to reduce its debt service obligations due in the medium term and achieve a more efficient maturity profile, which will provide it with additional financial flexibility to pursue its business strategy and obtain more favorable funding terms for its planned capital expenditure projects, while offering holders of the existing notes the opportunity to obtain a higher coupon and extend the maturity of a portion of their holdings of existing notes as well as the cash consideration.”

Specifically, the issuer is looking to boost the free cash flow available to the borrower in 2016, to preserve the group’s working capital and to finance capital expenditures.

The minimum offer amount is $200,000.

The issuer will also pay accrued interest to but excluding the settlement date.

The dealer managers Gazprombank (Switzerland) Ltd. (+41 44 386 86 86, fax +41 44 386 86 87 or bondsbook@gazprombank.ru), Renaissance Securities (Cyprus) Ltd. (+ 357 22 360 000 or Project.Inspiration@rencap.com) and CJSC Sberbank CIB / SIB (Cyprus) Ltd. (+7 495 787 2363 or liability_management@sberbank-cib.ru).

The exchange agent is Citibank NA, London Branch (+44 20 7508 3867, fax +44 20 3320 2405, exchange.gats@citi.com or debtxportal.issuerservices.citigroup.com).

KOKS is a coke and pig iron producer and miner based in Moscow.

© 2015 Prospect News.
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